Next 2012 profits up 9%

UK’s second biggest retailer to open more stores to compensate for subdued demand

Fashion retailerNext  unveiled a 9% rise in profits today but admitted trading in recent weeks had been "quiet". Paul Faith/PA Wire

Fashion retailerNext unveiled a 9% rise in profits today but admitted trading in recent weeks had been "quiet". Paul Faith/PA Wire

 

Next, the UK's second-largest clothing retailer, said the start of the new fiscal year has been "quiet" after reporting annual profit rose 9 per cent, just ahead of analysts' estimates.

Underlying pretax profit rose to £621.6 million (€729 million) in the year ended in January, the Leicester, England- based retailer said today in a statement.

The full-year dividend was increased 17 per cent to 105 pence. The retailer, with more than 500 stores across the UK and Ireland, has been opening standalone outlets selling its homewares, expanding its online business internationally and buying back shares.

That has helped its share price to outperform the benchmark UK FTSE 100 index in the year to date. Chief executive officer Simon Wolfson has promised another year of store openings and online growth to compensate for the "subdued" consumer environment.

"The year ahead looks no less challenging, but the group is well-prepared and has further opportunities for growth," Wolfson said in the statement.

Next shares rose as much as 2.1 per cent to £42.34 in London trading. The stock has gained 13 per cent this year, boosting its market value to £6.78 billion.

Next Brand sales will rise between 1 per cent and 4 per cent this fiscal year, the retailer forecast, while profit before tax may gain as much as 7 per cent.

Sales in the first few weeks of the year have been in the "bottom of our target range," the statement said. Next probably won't increase retail prices this year as a result of the pound's decline against the US dollar, but they might in 2014, the company said.

"The recent sharp fall in the value of sterling will have very little impact on this year's pricing as we have bought forward most of our foreign currency requirement for the current year," the company said.

"If the pound remains at its current rate of exchange against the dollar, we would expect our prices to rise in 2014."

Bloomberg